JAI SINGH Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE applicant-assessee required the Income-tax Appellate Tribunal (Amritsar Bench), to refer to this court certain questions of law under Section 256 (1) of the I. T. Act, which questions, according to the applicant, arose out of the order, dated September 9, 1975, of the said Tribunal, pertaining to the case of the applicant for the assessment year 1960-61, relevant to the accounting period ending March 31, 1960.

(2.) THE undisputed facts, culminating in the present reference, may be briefly noticed. For the assessment year mentioned above, the original assessment in the case of the applicant, was completed by the ITO on March, 12, 1965, on a total income of Rs. 67,906. During the course of the original assessment proceedings, the ITO found certain hundi loans introduced in the books of account of the assessee and out of the various hundi loans, the ITO, included such loans to the tune of Rs. 29,400, in the total income of the assessee. The addition so made by the ITO was upheld in appeal by the Tribunal.

(3.) IT is the case of the revenue that subsequently the ITO learnt that there was a hundi racket all over the country and a number of hundi bankers had confessed that they had been doing hawala business meaning thereby that they had not given any genuine loans to the parties concerned, but had only lent their names for such loans. The ITO found that six of the bankers or brokers who are shown to have advanced loans to the applicant were such parties, as referred to above. The names of these parties are detailed below :